Egypt terminates gas supply to Israel

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JERUSALEM, April 23 (UPI) -- Most Israeli officials downplayed Egypt's decision to terminate a natural gas supply to Israel, calling it a business dispute, not a politically motivated one.

Egypt announced Sunday it was ending its natural gas export contract with the Israeli company East Mediterranean Gas company, known as EMG, Ahram Online said.

"We are following what is happening in Egypt and hope everything will work out for the best," Israeli Foreign Minister Avigdor Lieberman told Israel Radio Monday in response the decision to halt the gas service.

Lieberman said Israel desires to uphold its peace accords with Egypt.

Knesset member Isaac Herzog described Egypt's decision to terminate the gas supply as a "negative development" but cautioned against over-reaction. "On a policy level it is clear to us all, both to Israel and to Egypt, to continue to maintain the peace treaty," he told Israel Radio.

Some Israeli officials called the decision a blatant violation of the Israeli-Egyptian peace treaty, Haaretz said.

Finance Minister Yuval Steinitz described the decision as one of "great concern," both politically and economically. "This is a dangerous precedent that casts a pall over the peace agreements and the peaceful atmosphere between Israel and Egypt," Steinitz said.

Amapl-American Israel Corp., which owns a 12.5 percent stake in EMG, said it had been notified of the decision to cut the gas supply.

A statement issued by the company said the Egyptian General Petroleum Corp. and the Egyptian Natural Gas Holding Co. notified EMG that they were "terminating the Gas Supply and Purchase Agreement between the parties," Ahram Online said.

"EMG considers the termination attempt unlawful and in bad faith and consequently demanded its withdrawal," the statement published on the Egyptian Web site said..

Since Hosni Mubarak was ousted as president of Egypt last year, the pipeline supplying natural gas to Israel (and to Jordan) has been sabotaged 14 times, causing the gas flow to Israel to be halted for months.

The 2005 gas agreement signed between Egypt and Israel has been harshly criticized by Egyptian leaders, who lashed out at Mubarak for signing the deal and alleged he had stolen millions of dollars from the proceeds, Haaretz said.